JSW Infrastructure IPO Review, GMP & More

About JSW Infrastructure

Founded in 2006, JSW Infrastructure Limited has emerged as a leader in the port-related infrastructure sector, boasting remarkable growth in installed cargo handling capacity and cargo volumes processed. Their array of maritime services includes cargo handling, storage solutions, logistics, and a host of value-added offerings. As they progress, they are actively transitioning into a comprehensive end-to-end logistics solutions provider.

JSW Infrastructure specializes in the development and operation of ports and port terminals, operating under Port Concessions. Their extensive presence spans across India, encompassing two non-major ports in Maharashtra, as well as a robust presence with seven major ports and terminals strategically positioned in the industrial hubs of Goa and Karnataka along the west coast, and in Odisha and Tamil Nadu along the east coast. Additionally, the company extends its operations with two port terminals in the United Arab Emirates, thus offering a global footprint to cater to both exports and imports.

About Company Operations

The company’s port concessions are strategically situated near JSW Group customers and are well-connected to cargo origination and consumption points, enabling the service of industrial hinterlands in Maharashtra, Goa, Karnataka, Tamil Nadu, Andhra Pradesh, and Telangana, as well as mineral-rich belts in Chhattisgarh, Jharkhand, and Odisha.

• The ports and port terminals typically enjoy extended concession periods, ranging between 30 to 50 years.
• The majority of the company’s assets possess the natural advantage of deep drafts, allowing for the direct berthing of larger vessels such as cape-size and post-panamax vessels. The Jaigarh Port on the west coast boasts an impressive draft of 17.5 meters, making it one of India’s deepest draft ports.
• They currently handle a wide array of cargo types, including dry bulk, break bulk, liquid bulk, gases, and containers. The cargo includes coal, iron ore, sugar, urea, steel products, rock phosphate, molasses, gypsum, barites, laterites, edible oil, LNG, LPG, and containers.

JSW Infrastructure IPO Details

• Issue Size (₹ crore): Total ₹2,800 cr
• Fresh Issue: ₹2,800 cr
• Offer For Sale: Not Applicable
• Issue Date: September 25, 2023, to September 27, 2023
• Price Band: ₹113 to ₹119 per share
• Bid Lot: 126 shares
• Issue Size: ₹2,800 cr
• Number of Shares (Post Issue): 210 cr
• Post-Issue Implied Market Cap: ₹24,990 cr
• EV/EBITDA Ratio (FY23): 15.35x

JSW Infrastructure Financial Performance (₹ crore)

• FY21
  • Revenue from Operations: ₹1,604
  • EBITDA: ₹891
  • Net Profit: ₹285
• FY22
  • Revenue from Operations: ₹2,273
  • EBITDA: ₹1,215
  • Net Profit: ₹330
• FY23
  • Revenue from Operations: ₹3,195
  • EBITDA: ₹1,798
  • Net Profit: ₹750

The object of the Offer

The company intends to allocate the net proceeds for the following purposes:

1. Prepayment or repayment of specific outstanding borrowings by investing in its wholly-owned subsidiaries, JSW Dharamtar Port Private Limited and JSW Jaigarh Port Limited.
2. Financing the capital expenditure needs of its wholly-owned subsidiary, JSW Jaigarh Port Limited, for planned expansion and upgrade projects at Jaigarh Port, which include the LPG Terminal Project, the establishment of an electric sub-station, and the acquisition and installation of a dredger.
3. Financing the capital expenditure requirements of its wholly-owned subsidiary, JSW Mangalore Container Terminal Private Limited, to support the expansion initiatives at Mangalore Container Terminal.
4. Allocation for general corporate purposes.

How is the Sector Doing?

According to a 2021 report by Niti Aayog, India’s logistics costs, as a percentage of its GDP, were approximately 14%, noticeably higher than the 10%-11% range seen in BRICS nations and the 8%-9% range in developed countries. Remarkably, Indian ports handle a significant portion of the country’s external trade, accounting for 90% of the volume and 70% of the value.

The Indian port sector is categorized into two segments: major ports and non-major ports. As of December 2022, India’s coastline boasts 12 major ports and nearly 217 non-major ports. Major ports are directly administered by the central government, whereas non-major ports fall under the jurisdiction of state governments.

Interestingly, the share of major ports has been steadily declining as non-major ports demonstrate superior efficiencies, shorter turnaround times, and competitive pricing. Over the next five years, it is anticipated that non-major ports will maintain a growth trajectory comparable to major ports, primarily driven by a decrease in imports and a modest increase in coastal traffic.

In the fiscal year 2023, port traffic experienced a noteworthy growth of 8.2%. Coal traffic, in particular, surged by an impressive 26% during the same period. Conversely, container traffic faced challenges stemming from macroeconomic factors, resulting in a subdued growth rate of 3% in FY23. However, robust coastal movement contributed to a 7% growth in overall iron ore traffic at Indian ports. Additionally, the demand revival across various end-user industries led to a 5% increase in POL (Petrol, oil, and lubricants) traffic in FY23.

Comparing JSW Infrastructure Limited with its major competitors

These figures provide a snapshot of the key financial metrics for JSW Infrastructure Limited and its major competitors in the industry, Adani Ports & SEZ Limited and Gujarat Pipavav Port Limited. It’s evident that each company has its unique strengths and market positioning based on market capitalization, revenue, EBITDA margin, PAT margin, and EV/EBITDA ratio.

Share Holding Pre and Post IPO

Here’s the information about Shareholding Pre and Post IPO, as well as the allocation of the offer:

Shareholding Pre IPO:

• Promoter Group: 96%
• Non-Promoter Non-Public: 4%
• Total: 100%

Shareholding Post IPO:

• Promoter Group: 86%
• Public: 11%
• Non-Promoter Non-Public: 3%
• Total: 100%

Allocation of Offer:

• QIB (Qualified Institutional Buyers): ₹2,100 crore, representing 75% of the issue.
• NIB (Non-Institutional Buyers): ₹420 crore, representing 15% of the issue.
• Retail: ₹280 crore, representing 10% of the issue.
• Total: ₹2,800 crore, representing 100% of the issue.

JSW Infrastructure IPO GMP Today

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